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Freelancer Payment Issues. Please Help ASAP! New York

02-19-2010, 11:17 AM

Hello Everyone,

Sorry if this is long, but I want to give the whole background...

I am a freelance graphic designer working in NYC. I was before the holiday season in the middle of December 2009 I started freelancing as a designer at a small studio. After the first weeks work I invoiced the employer for the hours. within about 2 weeks i received a check for my hours. after the holiday and in the new year this same employer asked me to come back to freelance for 2 weeks. Just as before after each week i sent him invoices for my services with P.O. numbers that were provided by them. After the 2 weeks they decided that my job was done there. (even though they were satisfied with everything) At this point i had not received any checks. After about 2 weeks from when I stopped working I followed up to see the state of the payments. The response was that he would be paying them 30 days from the date of the invoices (which would make it around the 15th of February) When it came to be that week I received an email telling me they were going to have to process me as an employee and that i would have to be registered into their payroll service and that all taxes were going to be taken out.

After a few back and forth arguments he stopped responding to me all together. The other day I got a check in the mail for only one of the invoices, and i was processed as an employee without any information from me (so all taxes were taken out)

I am at a lose on what to do... Is this legal for one...Also I do not work there anymore so how can they be claiming me as an employee? I did not receive any benefits then i was there... What should i do? He has already paid me as a freelancer in the past (which cancels his claim that he legally needs to pay me as an employee) I need the money..should I cash the check they sent in the meantime?

This is maybe complicated. Worker classification (employee vs. independant contractor) is statutory, meaning that there are actual laws on the subject. This is not the sort of thing that parties (employee and employer, customer and IC) can legally agree on between themselves. The worker classification is whatever the law says it is.http://www.dol.gov/esa/whd/regs/compliance/whdfs13.pdf

Now no one here has talked to your employer and no one knows what they are thinging. But what it sound like is:
- Some department head who does not know what they are doing decided to treat you like an IC (vendor). Regarding Net-30 for a vendor, that is actually quite common (for a vendor).
- They got caught by someone who actually knows what they are doing. The employer stopped further work being done to stop the bleeding and argued about what to do next. Why it took this long is a "no idea". This whole process should have taken very little time (yell at the idiot department head, yell at Purchasing, make you an employee, issue the check). Based on what has been said, what has not been said, and how long it took to do wha they did, it sounds like the employer does not have their stuff together (it happens).

Bottom line, it is very likely that you legally are an employee. Not because you want to be, but maybe because the law requires it. Worse, the payer is NEVER legally wrong to classify a worker as an employee (the converse is not true). So, basically you have a late paid check. Your state is not my state. Maybe there is some type of claim you can file with NYS for the late payment. Or not. I have no idea on that point. What I do know is that the worker classification as an employee is always legal, and often legally required.

Comment

Whether or not you should have been treated as an employee or an Independent Contractor is a matter for the IRS. Yes, they can decide to that you should be an employee, even if previously you had worked as an IC/freelancer. It is even possible depending upon the assignments that you were an IC the first time but not the second.

It is always legal to make you an employee. That is the default. If you refused to fill out tax forms then they can still treat you as an employee and take out the default tax amount (someone with an expertise in payroll can better explain what that is). If taxes were over withheld, you can file to get them back when you file your return. Or, you can cooperate and turn in the requested forms and the taxes can be handled the way you prefer.

As for other benefits, those are irrelevant to your status as an employee. In most cases someone hired short term is not eligible for other benefits granted to long term employees.

I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

Comment

I have one more question. If the second invoice which was dated and submitted about the same time as the other (that i just received a check for) does not come soon, and I get no word back from the employer. Is there something a claim in NY for a late payment?

and thanks again for all the help!

Comment

Since the employer is now treating you as an employee, that means you can just file a wage claim for unpaid wages with NY-DOL. Again, your state is not my state, but this is pretty common for states which have DOL, and NY does.

Past that, there is some advantage to sending a certified letter to the employer stating that you have unpaid wages. Do not get long, fancy, or argumentative. The shorter the letter and the less said, the better. They owe you unpaid wages. Ask for it. A certified letter (or other similar mechanism) should be taken as a single that the next step is some type of court action, in this case, a wage claim.

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